Strategies for Implementing AI in Law Firms

Over the past two years, the legal industry’s use of artificial intelligence tools has grown rapidly. According to a recent report by the Thomson Reuters Institute, 79% of law firms expect that legal AI technology will have a high or transformational impact on their work within the next five years, a significant 10 percentage point increase from 2023.

The American Bar Association, recognizing the positive potential and corresponding risks of AI in the practice of law, issued Formal Opinion 512 (the “Opinion”) in July 2024, offering guidance on the ethical use of generative AI tools. In this article we’ll review some of the key takeaways from the Opinion and provide practical strategies for the implementation of legal AI at law firms.

Key Takeaways from ABA Formal Opinion 512 and Implementation Strategies

The Opinion provides important ethical guidance for using AI in legal practice. It addresses several critical areas where legal AI intersects with lawyers' professional responsibilities. Below, we'll summarize key points from the Opinion and follow each with practical tips for implementation, blending the ABA's guidance with our recommendations for effective AI integration.

1. Duty of Competence (Model Rule 1.1)

According to the ABA, lawyers must maintain a "reasonable understanding of the capabilities and limitations" of the AI tools they use. The Opinion stresses the importance of thorough review and verification of AI-generated content in order to provide competent representation as required by Model Rule 1.1.

Implementation Tips:

Treat AI output with the same level of scrutiny you would apply to work from a junior attorney.
Always double-check assumptions and verify facts generated by AI.
Implement a rigorous review process for all AI-generated content, ensuring it aligns with your professional standards and the specific needs of each case.
Regularly update your knowledge about legal AI tools through continuing education and training.
Stay informed about the specific AI tools being used in your firm, as different tools may have different capabilities and limitations.

2. Confidentiality Obligations (Model Rule 1.6)

The Opinion warns that inputting client information into AI tools may risk unauthorized disclosure or access. Lawyers must carefully evaluate these risks, particularly when dealing with sensitive information such as protected health information under HIPAA, or when using self-learning AI tools, which, according to the Opinion, my “raise the risk that information relating to one client’s representation may be disclosed improperly.”

Implementation Tips:

Before inputting any client information into an AI tool, thoroughly evaluate the potential risks.
Familiarize yourself with the tool's privacy policies and data handling practices.
Distinguish between general-purpose AI tools and those designed specifically for legal use. Legal AI tools often have built-in safeguards for client confidentiality and may be preferable when handling sensitive information.
Consider using anonymized or hypothetical information when testing or exploring AI capabilities.
When the use of actual client data is necessary, obtain informed consent, clearly explaining the benefits and potential risks associated with AI use.

3. Communication with Clients (Model Rule 1.4)

The Opinion advises lawyers to disclose their use of AI tools, especially when these tools significantly influence important decisions in a case. The extent of required disclosure may vary based on the specific circumstances. The Opinion cites a number of Model Rule 1.4 subsections, which may call for disclosure depending on the circumstances, including Model Rule 1.4(a)(2), which states that a lawyer shall “reasonably consult with the client about the means by which the client’s objectives are to be accomplished.”

Implementation Tips:

Proactively discuss your use of AI tools with clients.
Explain how these legal technologies can enhance your services, potentially reducing costs and improving outcomes.
Be clear about the role AI plays in your work, especially when it influences significant decisions.
Address any concerns clients may have, emphasizing that AI augments rather than replaces your professional judgment.

4. Obligations to the Court (Model Rules 3.1, 3.3, and 8.4(c))

Lawyers' duties of candor and accuracy to the court extend to AI-generated content. Lawyers must be vigilant against "AI hallucinations," such as fake court opinions and other plausible but false information. Some courts now require lawyers to disclose their use of AI.

Implementation Tips:

Implement a multi-step verification process for any AI-generated content used in court submissions.
Cross-reference AI-generated legal citations with authoritative sources.
Be prepared to explain to the court, if asked, how AI was used in preparing submissions.
Maintain a system for documenting the verification process of AI-generated content.
Confirm whether a particular court requires disclosure of AI use.

5. Supervisory Responsibilities (Model Rules 5.1 and 5.3)

For lawyers in supervisory roles, the Opinion outlines responsibilities in overseeing the use of AI by subordinate lawyers and non-lawyer assistants. This includes establishing clear policies on AI use, ensuring proper training, and maintaining effective quality control measures.

Implementation Tips:

Provide training on ethical AI use for all staff members.
Establish a system for monitoring and reviewing AI use by subordinates.
Create a feedback loop to continuously improve AI usage practices based on experience and any issues that arise.

6. Billing Practices (Model Rule 1.5)

Lawyers should bill only for the actual time spent using AI tools, not for the time that would have been required without them. This guideline aims to ensure that the efficiencies gained through AI use benefit clients and are not used as a means to inflate fees.

Implementation Tips:

Bill only for the actual time spent using AI tools and reviewing their output.
Use AI as an opportunity to deliver more value to clients in less time, potentially at a lower cost, to build a long-term client relationship
Be transparent with clients about how AI use affects your billing practices.
Consider alternative fee arrangements that allow both you and the client to benefit from AI-driven efficiencies.

By implementing these recommendations, you can leverage the power of legal AI while upholding ethical standards. AI is a legal technology tool to enhance your practice, not a replacement for the critical thinking, judgment, ethics, and personal touch that are hallmarks of excellent legal representation.

Conclusion

As legal technology and AI continue to advance at a rapid pace, its integration into legal practice is becoming not just beneficial, but expected. Clients will increasingly seek out attorneys who can harness AI to provide more efficient, cost-effective services. However, in the process, lawyers will be forced to navigate new ethical challenges. As we move forward, staying informed about AI advancements and their ethical implications will be crucial. By embracing AI's potential while upholding professional ethical standards, lawyers can effectively use legal AI, as opposed to being displaced by it, and enhance their practices and better serve their clients in the process.

As a legal industry technology executive, Jason Primuth brings broad experience in court reporting technology. Prior to his role as Chief Innovation Officer at Lexitas, Jason was the General Manager of RealLegal and the Vice President of Sales at LiveNote, Inc. which included LiveNote software and West Court Reporting Services, the court reporting division of Thomson Reuters.

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